Oil prices rose for a fourth straight day on Thursday after a new wave of U.S. strikes on Iranian military installations fuelled fears of renewed full-scale conflict and supply disruptions in the Strait of Hormuz.
The United States struck Iran’s coastal defences and missile sites on Wednesday after reimposing a naval blockade of its ports, while Iran threatened to shut off more regional energy exports, saying it was engaged in an “existential war” with America.
Brent crude futures climbed 33 cents, or 0.4%, to $85.28 a barrel by 0026 GMT, while U.S. West Texas Intermediate futures rose 42 cents, or 0.5%, to $80.02 a barrel.
Both benchmarks gained about 0.3% on Wednesday and were hovering near their one-month highs touched on Tuesday.
“With tensions in the Middle East flaring up again, buying is taking the lead,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.
“While mediation efforts by neighbouring countries continue and the consensus view is that a full-scale war is unlikely, WTI could still rise to $85–$87 depending on how the conflict develops,” he said.
Oil prices have gained this week as attacks deepened supply disruption in the Strait of Hormuz, which handled about a fifth of the world’s oil and liquefied natural gas trade before the war began.
Hostilities between Iran and the U.S. reignited last week, fraying an already fragile truce reached in June after several months of fighting.
Analysts say Iran has signalled it may use its Houthi allies in Yemen to shut the Bab el-Mandeb gateway to the Red Sea, opening a new front against Washington and putting two of the world’s most vital energy arteries at risk.
Goldman Sachs said Brent could exceed $110 in the fourth quarter if the Gulf export recovery continues to stall, but could fall into the $60s by year-end if tensions ease and production recovers faster than expected.
Meanwhile, the U.S. Energy Information Administration said crude inventories fell by 1.7 million barrels in the week to July 10, compared with analysts’ expectations for a 2.6 million-barrel draw.
(Reporting by Yuka Obayashi Editing by Shri Navaratnam)